BAA says cost of Stansted will be &#163;1bn less at &#163;2.7bn

The airports group BAA lowered its cost forecasts for a second runway at London's Stansted Airport by some 30 per cent yesterday, saying the project would now be more environmentally friendly, use less land, and come in a £1bn under its original budget.

The new runway, which is set to eventually double capacity at Stansted to about 76 million passengers a year, is now expected to cost £2.7bn, compared to original Government estimates of £3.7bn.

Mike Clasper, the chief executive of BAA, said: "We've examined in great detail the environmental impacts of the project, in order to ensure that they are reduced as far as possible. The good news is that we've managed to reduce the costs of this project by nearly 30 per cent, compared with the Government's original estimate."

Several airlines yesterday spoke out against the plans for major expansion at Stansted, calling on the Government to tackle BAA's monopoly in the London airport system. As well as owning Stansted, it owns Heathrow and Gatwick.

A joint statement from several airlines, including Ryanair and easyJet, added that BAA's reduced cost estimates were "deeply flawed and misleading", claiming the real total cost would be closer to £4bn. They said they remained opposed to any rise in charges to pay for the expansion, and are believed to be considering legal action against BAA if it does not listen to their demands.

BAA launched a detailed consultation yesterday to determine the precise location of the second runway - including proposals to scale back the originally proposed perimeter of the development. However, it continues to face fierce opposition from local residents and environmental groups.

Peter Sanders of the Stop Stansted Expansion Group said: "BAA's slightly scaled back perimeter would do nothing to alleviate the widespread impact that the project as a whole would have across Essex, Hertfordshire and Suffolk, or to reassure those in the villages most directly affected by BAA's land grab.

"By no stretch of the imagination could the noise from three times as many planes at Stansted as today be ignored, nor could the impacts which would result from an extra million passengers per week travelling to and from the airport, largely by road but also on a creaking rail system."

Elsewhere, despite BAA's boast over its success, workers on Heathrow's Terminal 5 were preparing yesterday to stage a strike. Hundreds of construction employees will now walk out on 16 and 19 December and again on 20 and 23 January as part of a campaign for a £1 an hour increase in their bonus payment.

The workers, employed by Laing O' Rourke, will also ban overtime over the two weekends of the industrial action, effectively causing four days of disruption during each stoppage. The three unions representing the workers have rejected a rise of 22p an hour.